CFPB Issues Rule on TILA Financial Emergency, Rescission & Change of Circumstances
April 29, 2020 – The CFPB issued an Interpretive Rule today titled: Application of Certain Provisions in the TILA-RESPA Integrated Disclosure Rule and Regulation Z Right of Rescission Rules in Light of the COVID-19 Pandemic.
The rule allows for COVID-19 to be a “financial emergency reason for borrowers to WAIVE the TRID closing waiting period and the three-day right of rescission.
“The Bureau understands that the COVID-19 pandemic could pose temporary business disruptions and challenges for covered persons that are involved in the mortgage origination process, including creditors, loan originators, settlement agents, and other parties such as real estate appraisers. The Bureau recognizes, furthermore, that consumers may have acute needs for proceeds from mortgage transactions as well as uncertainty and confusion about the origination process.”
The announcement also states, the CFPB recognizes “The difficulties some businesses are facing include operational and staffing challenges in processing loan applications, estimating mortgage transaction costs, delivering disclosures, providing third party services relating to mortgage origination, and closing loans. The Bureau understands that these difficulties also are affecting some other entities, such as county recorders’ offices, that provide information relating to the costs of mortgage transactions or otherwise play a role in the mortgage origination process.”
The full rule can be found here.
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